Managing The Digital Enterprise

Individual Assessment

1. Introduction

With the development of technology, social networking sites have become more and more popular in global. The emergence of social networking sites has attracted many people to use to meet more people. Therefore, the growth rate and revenue of social networking sites are also obvious and fast. This report aims to analyze the business models and strategies of 4 different social networking sites. 2 are popular nowadays and 2 are failed in the social networking site’s market. The revenue and user data and comparison will be used in order to have a deep analysis of social networking sites. Finally, the Conclusion will be involved to analyze the future of social networking might be.

2. Site I: YouTube

YouTube is a video Social Networking site, which it the 2nd most popular search site on the Internet after Google. Nowadays, watching YouTube video is significant activity on the Internet which has over 1 billion visits to YouTube per day and over 100 million videos can watch every day. And it’s easy for anyone who sees your video to rate it and share it with his Social Network. YouTube’s theme is “Broadcast Yourself”. This theme means to encourage everyone to make and broadcast videos on everything imaginable. YouTube is owned and operated by Google, and influences the search power of Google. (‘Introduction to YouTube Marketing’, n.d.)

· Business model & strategies of Youtube

YouTube has 2 key activities to operate their business to earn money, making people watching and developing & optimizing advertising tools. For making people watching, YouTube must have a lot of most updated and trend videos in global so that people will keep watching on YouTube. Therefore, while doing customer relationships and segment, YouTube gives customers large freedom for them to create different types of video. Those can be a vlog, gameplay, news, etc. That openness of YouTube channel makes lots of users make more videos. After those “handmade” videos get popular in YouTube though views and subscribe, YouTube will find different advertisers to earn their sponsors by 3 advertising ways, sponsored video, own landing placements, and embedded advertising. (Oakley, 2018) (‘How does YouTube Make Money and YouTube Business Model’, 2016)

· Business performance of Youtube

YouTube is owned by Alphabet, Google’s parent company, which doesn’t reveal advertising revenue that it’s been generating with advertising YouTube. But according to third-party estimates like this one you can see below from Business Insider, as of 2015 YouTube was generating $8 billion, 8x jump from 2010 when the company’s annual advertising revenue estimate was only $1 billion. ((Artyom, 2019))

Number of users

According to the following graph from TechCrunch, the only major platform, which is above YouTube, is Facebook with 1.5 billion and 2 billion MAU respectively. If only on video content platforms type, Facebook and Snapchat (255 million monthly active users) are the only real competitors that YouTube needs to worry about. YouTube becomes the second most of user in the world. (Artyom, 2019)

3. Site II: Instagram

Instagram is a social networking app made for sharing photos and videos from a smartphone. It is similar to Facebook or Twitter, everyone who creates an Instagram account has a profile and news feed. When the user posts a photo or video on Instagram, it will be displayed on their own profile. Other users who follow then will see their posts in their own feed. Likewise, you’ll see posts from other users whom you choose to follow. It seems like a simplified Facebook, with an emphasis on mobile use and visual sharing. (Elise, 2019)

· Business model & strategies of Instagram

Instagram’s customers are very different. It doesn’t like YouTube that has advertisers to sponsor it. Its customers are each and every person who owns a smartphone. That means advertisers can free to promote its products in their own Instagram account. It is because Instagram’s value propositions are very simple and easy to use and offer easy and effective formal advertising good pictures. Therefore, Pictures are the main revenue of Instagram. Instagram’s key activities are enhancing user experience and grow and manage their user base. Its user base will be connected with Facebook, which is the key partner of Instagram. (‘How Instagram Works: Business and Revenue Model’, n.d.)

· Business performance of Instagram

No. of users

According to picture 2, it can see that Instagram have 700 minion monthly users in April 2017. Combining other popular social media sites such as Facebook, Twitter and Snapchat, Instagram is the second most of the user in the world. Even combined twitter’s and Snapchat’s users, it still cannot bite down Instagram as well.

Comparing the growth of Instagram monthly active users with other top social media apps –Snapchat, in 2013-2016, Snapchat loyal user base grew from 33 million in 2013 to 300 monthly active users, meanwhile, Instagram grew from 150 to 600 million for the same period. Essentially, the Snapchat team has managed to get an order of a scale more MAU by 2016 and Instagram only more than 40 percent. Given the fact that by 2013 Instagram had been a whole year part of the Facebook Empire, it’s not surprising that it had a higher start than Snapchat had but it’s obvious that over this period of time Snapchat enjoyed a faster user base growth. (Artyom, 2018)

Revenue

In October 2013, Instagram started to roll out its advertising solution and began seeing the photo and video advertising in their feed. By 2015 advertising began to pick up steam and Instagram managed to earn $0.63 billion in revenue, the next year it tripled this number reaching $1.86 billion, in 2017 the revenue growth slowed down, the company managed only to double the previous year number reaching $3.64 billion. The 2018 Instagram revenue forecast promises to almost double it again, hopefully reaching $6.84 billion. (Artyom, 2018)

4. Site III: Google+

Google+ is Google’s flagship social network. It allows users to connect easily and often, through interests and friendship. It’s not an independent service – instead, it is integrated and connected through all Google services as part of the ‘ecosystem’. Interactions with individuals or companies are based on profiles or pages. Here is a useful example created by Google to share tips and hints on using Google. (Carolanne, 2017)

· Business model & performance of Google+

Google+ makes use of the Google search engine, Google Profiles, and the +1 button. Google+ originally launched with the elements of Circles, Huddle, Hangouts, and Sparks. Huddle and Sparks were eventually eliminated. Those features can put some advertising and promotion so that Google+ can earn the money for it. (Laura, 2019)

In 2016, 440 million monthly active users were Google+ and 2.2 billion profiles are created in google+. Until 2018, there are statist that there are approximately 395 million monthly active users on Google+ and 28 % of Google plus users are aged between 15 and 34 years. The United States alone constitutes 55% of all the users. 73.7% of the users are male while 26.3% are female. It is estimated that on average, a Google+ user will spend 3 minutes and 46 seconds per visit. (Here, Media, Stout & Stout, 2019)

· Why the business strategies of Google+ are failed?

Google+ mission is competitive with Facebook this popular social media website. Although Google+ is more efficient than Facebook, the mother company, Google, thinking employees want first more than public users or consumers. People prefer Facebook to Google+, fundamentally because Google’s approach to social isn’t fun. The assumption of Google+, like Google Health and Google PowerMeter, is that users would enjoy spending time organizing their information. Geeks may like organizing their information but normal people don’t. Google keeps making the same error over and over again, because it listens to its employees, ahead of its customers. (Steve, 2015))

Second, Google+ wants to be a multifunctional social media sites, therefore, it involves lots of social elements such as business, music, sports, car selling, etc. So that it will let users confused that is it a social media sites or an online shop or business websites. Google+ hasn’t maintained the original function: social communication. It is because Google+ had been involved in many business elements so that it just not like Facebook that can meet with friends easy. Google+ should be more simple and effective in social media function.

5. Site IV: Myspace

In 2003, Myspace was born and it can be credited to have connected hundreds of people around the world and render an efficient dais for their interaction; thanks to their common interests in music, movies, and popular culture. When Myspace was at its zenith, it users used to spend hours and hours each day; connecting with a wide range of audience via a virtual rostrum. The business model of Myspace enabled millions of users across the globe to garnish their profiles according to their personality, taste, and experience. (‘Business Model of Myspace – StudiousGuy’, n.d.)

· Business model & performance of Myspace

For the business model of Myspace, Myspace has different types of functions and elements. Those elements are individual to show it and it is clear and interesting. The most popular function in Myspace is free music. In 2003, free music download is so less on the internet. Myspace break through this limit and created the largest social network on the internet. Also, the birthplace of A Vast Market makes online business more even. Besides, the live-Streaming videos and music functions are also attracted tons of users to watch. (‘Business Model of Myspace – StudiousGuy’, n.d.)

For business performance, Myspace adopted the advertising-only model of revenue generation and not subscription-based models. It conglomerated a strong brand affiliation with entertainment and also attempted to bridge the gap between online and offline user experience. It set out to establish a particular brand tone in the consumer’s minds. During the 2008 fiscal year, Myspace generated nearly $800 million as revenue. (‘Business Model of Myspace – StudiousGuy’, n.d.)

By November of 2004, Myspace’s number of users grew to 5 million. By 2006, Myspace was being visited more times than Google Search and Yahoo! Mail. Myspace becomes the most visited website in the United States. In June of 2006, it was reported that Myspace was responsible for nearly 80 percent of all traffic related to social networking sites. (Elise, 2018)

Why Myspace will fail in social media network?

Myspace is certainly not as popular as it once was, and it’s lost a lot of money. Most people have moved to other popular social networks instead of Myspace. Officially, Myspace is still far from being dead. In fact, Myspace was still boasting 15 million monthly active visitors as of 2016. Although it might be as good as dead to millions of past users who’ve moved on (presumably to Facebook and Instagram), Myspace is still thriving on a much smaller scale than it once was.

Myspace users have their own home page that can create different types of artist background to show their artistic talent. Myspace allows their users to hack everything in the page until nothing is usable, legible or tolerable. However, pages are riddled with high-res backgrounds, the text isn’t protected, and colors, styles, and sizes are fully unlocked—just to name a few. All of this creates a design playground which breeds annoying layouts that distract from the page’s content. In contrast, Facebook has chosen to restrict at least the foundational framework of the site. (‘Fame Foundry — We Craft the Brand Experience’, 2009)

Another problem of Myspace advertising is too much so that it makes users very annoying. The number of large, animated, irritating, irrelevant and sometimes offensive as compared to what matters—content and utility—is terribly imbalanced. While Facebook has yet to turn a profit at the date of this article, it will eventually need to solve this problem and will most certainly shift its balance as well. Until the day comes when Facebook burns through its cash faster than investors can pour it in, this difference makes it an easy switch from MySpace to Facebook. (‘Fame Foundry — We Craft the Brand Experience’, 2009)

6. Conclusion: After the future

To be concluded, social networking becomes our daily life now. Everyone will not get strange for social working as there are over a billion are using in the world. On top of that, social networking sites will keep upgrading their business and functions in order to attract more users to try social networking and expand their business. For example, when Instagram built a story function, the users of Instagram increased quickly. After that, other competitors also started to provide this function such as Twitter and Facebook. But the result is not very considerable. It seems that the innovation of social networking is not copying, is have lots of areas to develop after the future.

Just like Google+, it is simplified to Facebook base function but added other elements and functions. But Google+ still needs to be ended as fewer and fewer users are willing to use it. Not only because of the hacking, but also Google+ is not suitable for the social networking site.

Myspace is just get eliminated for this social now as more efficient and easy-use social networking sites can be replaced. Even some of the functions of Myspace is still very cool, the technology and fashion have been changed so far so that Myspace cannot keep following those step of it.

7. Reference

Myspace:

1. Fame Foundry — We Craft the Brand Experience. (2009). Retrieved from http://www.famefoundry.com/382/deadspace-7-reasons-why-myspace-is-as-good-as-dead/
2. Elise, M. (2018). Is Myspace Still Around? Retrieved from https://www.lifewire.com/is-myspace-dead-3486012
3. Business Model of Myspace – studious guy. Retrieved from https://studiousguy.com/business-model-myspace/

Google+:

1. Steve, D. (2015). Five Reasons Why Google+ Died. Retrieved from https://www.forbes.com/sites/stevedenning/2015/04/17/five-reasons-why-google-died/#4552d25b4474
2. Laura, L. (2019). What Are the Differences Between Google+ and Facebook?. Retrieved from https://www.thebalancesmb.com/googleand-vs-facebook-what-s-the-difference-2296062
3. Carolanne, M. (2017). An introduction to marketing with Google+ | Smart Insights. Retrieved from https://www.smartinsights.com/social-media-marketing/google-plus-marketing/introduction-marketing-google/
4. Here, S., Media, S., Stout, D., & Stout, D. (2019). Social Media Statistics: Top Social Networks by Popularity. Retrieved from https://dustn.tv/social-media-statistics/#google-plus-stats
5. Blogger, G., & Blogger, G. (2016). Google Plus Users Statistics 2016 Infographics | GMI. Retrieved from https://www.globalmediainsight.com/blog/google-users-statistics/

Instagram:

1. Artyom, D. (2018). Retrieved from http://www.businessofapps.com/data/instagram-statistics/
2. How Instagram Works: Business and Revenue Model. Retrieved from https://www.apptunix.com/blog/instagram-business-model/
3. Elise, M. (2019). Everyone’s Using This App Called Instagram… What Is It?. Retrieved from https://www.lifewire.com/what-is-instagram-3486316

Youtube:

1. Artyom, D. (2019). Retrieved from http://www.businessofapps.com/data/youtube-statistics/
2. Oakley, D. (2018). What is the YouTube Business Model? | Denis Oakley. Retrieved from https://www.denis-oakley.com/what-is-the-youtube-business-model/
3. Introduction to YouTube Marketing. Retrieved from https://www.bobology.com/members/login.cfm?hpage=Introduction-to-YouTube-Marketing.cfm
4. How does YouTube Make Money and YouTube Business Model? (2016). Retrieved from https://unicornomy.com/how-does-youtube-make-money-business-model/